An enterprise architecture for environmental information management and reporting

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AN ENTERPRISE ARCHITECTURE FOR

ENVIRONMENTAL INFORMATION MANAGEMENT

AND REPORTING

Anthea Van der Hoogen

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An Enterprise Architecture for Environmental

Information Management and Reporting

By

Anthea Van der Hoogen

Submitted in fulfilment of the requirements for the degree Magister Commercii in the Faculty of Science at Nelson Mandela Metropolitan University

December 2013

Supervisor: Dr Brenda Scholtz Co-Supervisor: Prof André Calitz

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Declaration

I, Anthea Van der Hoogen (s207026467), hereby declare that the dissertation for the degree Magister Commercii is my own work and that it has not previously been submitted for assessment or completion of any postgraduate qualification to another University or for another qualification.

___________________________ Anthea Van der Hoogen

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Acknowledgements

I would like to thank God for providing me with the strength and resources to complete this research.

I want to express my utmost gratitude to my Supervisors Prof. André Calitz and Dr. Brenda Scholtz for their countless hours spent in assisting me with this research. I would not have been able to complete this research without their guidance, encouragement and wisdom provided. I would also like to thank Dr. Jacques Pietersen and Mr. Danie Venter, from the NMMU Unit for Statistical Consultation, for their assistance in analysing and presenting the results of the survey study conducted in the course of this research.

I would like to thank the staff and students from the Department of Computing Sciences for their advice, input and guidance during many research sessions.

The financial assistance by the National Research Foundation (NRF) and the Vodacom/NMMU Scholarship towards this research is hereby acknowledged. Opinions expressed and conclusions arrived at, are those of the author and are not necessarily to be attributed to the sponsors (NRF and Vodacom/NMMU scholarship).

Thank you to Dr. Blanche Pretorius for the financial support which assisted with editorial requirements.

Thank you to Dr. Annelie Pretorius and Simone Beets for assisting with the technical editing of this dissertation.

Thank you to Mr. John Cullen for assisting with the grammatical editing of this dissertation. To my family and friends, I would like to thank you for your support and encouragement during those stressful periods and for never allowing me to doubt.

A special thanks to my fiancé who has been so patient and supportive throughout the duration of this study, for understanding and sacrificing many social events to accommodate me.

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Summary

Organisations globally are communicating their environmental sustainability impact to stakeholders by means of the widely used sustainability report. A key benefit of environmental sustainability reporting is that organisations can gain a positive reputation when these reports are presented to stakeholders. Organisations in South Africa are faced with many challenges regarding managing sustainability information and producing an environmental sustainability report. Two of the primary challenges are the many diverse standards for sustainability reporting and data quality issues.

Information Technology (IT) can be used to support and improve the process of sustainability reporting but it is important to align the environmental sustainability strategies with the strategies of business and also with the IT strategy to avoid silos of information and reporting. Enterprise Architecture (EA) can be used to solve alignment problems since it supports business-IT alignment. EA is defined by the International Standards Organisation (ISO) as “The fundamental concepts or properties of a system in its environment embodied in its elements, relationships, and in the principles of its design and evolution”. It can be argued, therefore, that EA can be used to

support environmental sustainability information management and the reporting process by means of its support of improved business-IT alignment and ultimately integrated systems. The main objective of this study is to investigate how EA can be used to support environmental information management (EIM) and reporting. A survey study of thirty one prominent South African organisations was undertaken in order to investigate the status of their EA adoption and environmental reporting and EIM processes. An EA for EIM Toolkit and a set of guidelines are proposed which can provide support for EIM through the use of EA. These guidelines were proposed based on best-practice for each of the three process levels of an organisation, namely, the strategic level, the operational level and the technological level. The toolkit and guidelines were derived from theory and the results of the industry survey were then validated by an in-depth analysis of a case study consisting of multiple cases with key employees of seven South African organisations which have proved to be successful at EA and EIM and reporting. The results of the case study show that the EA for EIM Toolkit and related guidelines can assist organisations to align their environmental sustainability strategies with their organisational and IT strategies.

Keywords: Sustainability reporting, environmental reporting, environmental sustainability strategy, environmental information management, enterprise architecture.

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List of Figures

Figure 1-1: EA Activity Ranking (Schekkerman, 2005) ... 6

Figure 1-2: Overall Chapter Structure ... 14

Figure 2-1: Chapter 2 Structure ... 16

Figure 2-2: Levels of The Operational Sustainability Framework (Labuschagne et al., 2005) ... 18

Figure 2-3: Sustainability Report Alignment with Relevant Standards and Regulations, adapted from KPMG (2008) ... 32

Figure 2-4: Baseline Environmental Sustainability Data Assessment (Speshock, 2010) ... 35

Figure 2-5: An EMS, adapted from Marx Gómez and Teuteberg (2010) ... 37

Figure 2-6: Alignment of IT with an Organisation’s Strategy, adapted from Speshock 2010) ... 39

Figure 2-7: Environmental Sustainability Reporting Component Model ... 42

Figure 3-2: Zachman Framework 3.0 (Zachman, 2008) ... 47

Figure 3-3: The TOGAF ADM Phases (The Open Group, 2009b) ... 49

Figure 3-4: TOGAF Content Metamodel (The Open Group, 2009b) ... 51

Figure 3-5: Consolidated Reference Model (Federal Enterprise Architecture Framework, 2013) ... 52

Figure 3-6: Oracle Enterprise Architecture Framework (Oracle, 2009, 2012) ... 54

Figure 3-7: The E2SP Service Centre Architecture and the Users (Cislaghi et al., 2006) ... 63

Figure 3-8: Reference Architecture for Sustainability Reporting (Solsbach et al., 2011) ... 65

Figure 3-9: EA Components Model ... 67

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Figure 4-2: The Research Onion Process, adapted from Saunders et al. (2009) ... 74

Figure 4-3: Research Process ... 77

Figure 4-4: Survey Strategy Process ... 79

Figure 4-5: Case Study Strategy Process ... 85

Figure 5-2: Size of Participating Organisations in terms of Number of Employees ... 91

Figure 5-3: EA and Environmental Sustainability Staff at the Organisations... 91

Figure 5-4: Job Titles for EA Questionnaire Participants ... 94

Figure 5-5: Number of years of having an EA Programme ... 95

Figure 5-6: EA Design Incorporating Environmental Information ... 97

Figure 5-7: Frequency Distribution for EA Objectives ... 99

Figure 5-8: Frequency Distribution for EA Benefits ... 100

Figure 5-9: Frequency Distribution for EA Models ... 102

Figure 5-10: Frequency Distribution for EA Modelling Notations ... 104

Figure 5-11: Frequency Distribution for Technologies used for EA ... 106

Figure 5-12: Job Titles for EIM Questionnaire Participants ... 110

Figure 5-13: Environmental Sustainability Objectives ... 113

Figure 5-14: Reporting in Organisations ... 114

Figure 5-15: Standards for Environmental Sustainability Reporting ... 115

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Figure 5-17: Environmental (EN) Indicators ... 120

Figure 5-18: EA for EIM Toolkit (Version 2) ... 128

Figure 6-2: Ranking Categories ... 133

Figure 6-3: EA for EIM Toolkit (Version 3) ... 152

Figure 7-2: Environmental Sustainability Reporting Component Model ... 161

Figure 7-3: EA Components Model ... 162

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List of Tables

Table 1-1: Chapters Addressing Research Questions and Objectives ... 13

Table 2-1: Sustainability Reporting Benefits ... 22

Table 2-2: Environmental and Sustainability Reporting Challenges ... 23

Table 2-3: Sustainability Reporting Standards, adapted from UNEP et al. (2010) ... 27

Table 2-4: Standards for Supporting Environmental Sustainability Reporting Objectives... 28

Table 2-5: Stakeholders and their Information Requirements (an insight), adapted from KPMG (2008)36 Table 3-1: EA Objectives Classification Model ... 56

Table 3-2: Benefits of EA Programme Adoption ... 57

Table 3-3: Challenges of EA Programme Adoption ... 59

Table 3-4: EA Models ... 59

Table 3-5: Modelling Notations ... 61

Table 3-6: EA Technology Strategies ... 62

Table 4-1: Research Instruments ... 80

Table 5-1: Industries of Participating Organisations ... 90

Table 5-2: Cronbach’s Alpha for EA Questionnaire Sections ... 92

Table 5-3: Cronbach’s Alpha for EIM Questionnaire Sections ... 92

Table 5-4: Practical and Statistical Significance Interpretation Intervals ... 93

Table 5-5: Biographical Information ... 93

Table 5-6: Status of EA Programme ... 96

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Table 5-8: EA Objectives for the Organisations (n = 31) ... 98

Table 5-9: EA Benefits for Organisations (n = 31) ... 100

Table 5-10: EA Models Used in Organisations (n = 31) ... 101

Table 5-11: EA Frameworks Adopted in Organisations (n = 31) ... 103

Table 5-12: EA Modelling Notations Used in Organisations (n = 31)... 104

Table 5-13: EA Technologies Used in Organisations (n = 31) ... 106

Table 5-14: EA Benefits Classified by Categories ... 108

Table 5-15: EA Challenges Classified by Categories ... 109

Table 5-16: Biographical Information ... 110

Table 5-17: Status of Sustainability Reporting ... 111

Table 5-18: Target Audience for Sustainability Reports (n = 31) ... 111

Table 5-19: Environmental Sustainability Objectives (n = 31) ... 112

Table 5-20: Reporting Included in Organisational Processes (n = 31) ... 113

Table 5-21: Standards for Environmental Sustainability Reporting (n = 31) ... 115

Table 5-22: Stakeholder Concerns in Terms of Importance to Organisations (n = 31) ... 116

Table 5-23: Sustainability Reporting Tools and Technologies (n = 31) ... 117

Table 5-24: Types of Tools and Technologies for Environmental Sustainability Reporting ... 118

Table 5-25: Environmental (EN) Indicators (n = 31) ... 119

Table 5-26: Environmental Sustainability Benefits Classified by Categories ... 121

Table 5-27: Environmental Sustainability Challenges Classified ... 122

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Table 6-2: Overall EA and EIM Distribution of Mean Values per Questionnaire Section ... 134

Table 6-3: Ranking Categories of Case Study Participants... 135

Table 6-4: Case Study Participants Profile (n = 7) ... 135

Table 6-5: EA for EIM Toolkit Best Practice Guidelines ... 138

Table 6-6: Interview Questions and Responses per Organisation (n = 7) ... 142

Table 6-7: Success Factors for Environmental Reporting ... 145

Table 6-8: Verification of Guidelines per Organisation ... 147

Table 7-1: Research Questions and Chapters Addressing the Questions ... 156

Table 7-2: Status of Environmental Sustainability Reporting ... 156

Table 7-3: Standards, Tools and Technologies Used ... 157

Table 7-4: EN indicators ... 157

Table 7-5: EA Elements ... 158

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List of Abbreviations

AA1000APS AA1000 AccountAbility Principles Standard AA1000AS AA1000 Assurance Standard

ABB Architecture Building Blocks ADM Architecture Development Method AF Architectural Framework

APIs Application Programming Interfaces

ARIS Architecture of Integrated Information Systems ARM Application Reference Model

ASP Application Service Provider BI Business Intelligence

BPM Business Process Management

BPMN Business Process Modelling Notation BRM Business Reference Model

CDP Carbon Disclosure Project

CERES Coalition for Environmentally Responsible Economies CFO Chief Financial Officer

CIO Chief Information Officer

CLIME Climate and Lake Impacts in Europe CMMI Capability Maturity Model Integration COP17 Conference of Parties

CRF Connected Reporting Framework CRM Consolidated Reference Model DoD Department of Defense

DoDAF Department of Defense Architecture Framework DRM Data Reference Model

DSS Decision Support System

E2SP Environmental Enterprise Service Provider EA Enterprise Architecture

EDM Enterprise Data Model

EIM Environmental Information Management EITI Extractive Industries Transparency Initiative EM Enterprise Modelling

EMAS Eco-Management and Audit Scheme

EMIS Environmental Management Information System EMS Environmental Management System

EN Environmental

ERP Enterprise Resource Planning

ESG Environmental, Social and Corporate Governance FEAF Federal Enterprise Architecture Framework

GHG Greenhouse Gas

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xvi GRI Global Reporting Initiative

IAASB International Auditing and Assurance Standards Board ICT Information Communication Technology

IDEF Integration DEFinition

IFEAD Institute For Enterprise Architecture Development IRM Infrastructure Reference Model

IS Information Systems

ISAE International Standard on Assurance Engagements ISO International Organisation for Standardisation

IT Information Technology

JSE Johannesburg Stock Exchange KPI Key Performance Indicator LCA Life-cycle assessment

MODAF Ministry of Defense Architecture Framework

MS Microsoft

NGO Non-Government Organisation

NMMU Nelson Mandela Metropolitan University OEAF Oracle EA Framework

OECD Organisation for Economic Co-operation and Development PAS Publicly Available Specification

PFMA Public Finance Management Act PRM Performance Reference Model

RC Ranking Category

RO Research Objective

ROI Return on Investment

RQ Research Question

SAAS Software as a Service

SD Standard Deviation

SOA Service Oriented Architecture SRI Socially Responsible Investment SRI Index Socially Responsible Investment Index SRM Security Reference Model

STORM Sustainable Online Reporting Model

TAFIM Technical Architecture Framework for Information Management TBL Triple Bottom Line

TOGAF The Open Group Architectural Framework UML Unified Modelling Language

UN United Nation

UNEP United Nations Environment Programme UNPRI UN Principles for Responsible Investment

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Chapter 1 Introduction

Background

1.1

Transparency of sustainability impact has become a critical objective for modern organisations in order to maintain their competitive advantage and environmental sustainability in particular is becoming part of the so called corporate agenda (Weybrecht, 2010). Sustainability is seen as the centre-piece of an organisation and it is strongly advised that sustainability issues should be included in the overall strategy of the organisation (Magoulas et al., 2012; SAICA, 2009). This will benefit the organisation as it will market the organisation to the public and stakeholders as being a responsible corporate citizen (SAICA, 2009). In South Africa, corporate citizenship entails that organisations should be sustainable and therefore they should be able to support and meet the needs of future generations.

Internationally, organisations are making a priority of reducing their environmental impact (UNEP et al., 2010). The South African government committed to reducing its carbon footprint during the 17th Conference of Parties (COP17) international event (DEA, 2011). South African companies producing Global Reporting Initiative (GRI) reports, have shown an increase in taking action in reducing their carbon footprint by disclosing such information (Rea, 2012). South African organisations by law have to “apply or explain” the King III report which places great emphasis on sustainability (SAICA, 2009). Sustainability reporting includes three areas also known as the Triple Bottom Line (TBL) namely: economic, environmental and social (Elkington, 1994). A sustainability report should therefore include these three areas (GRI, 2013a). Environmental sustainability reporting is thus a subset of sustainability reporting.

The long-term survival and profitability of many international organisations are becoming more dependent on sustainability reporting systems and proper records management (Chachage et al., 2006). Record management is also an important feature of environmental information systems as most of the data that are being recorded constantly has to be managed simultaneously. In order for an organisation to address its environmental performance, it has to address its environmental sustainability strategies, also known as “Green” initiatives (Esty and Simmons, 2011; Speshock, 2010; Weybrecht, 2010). Many environmental sustainability strategies have been adopted by organisations in order to better manage their impact on the environmental (Speshock, 2010).

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Sustainability should be seen as an integrated aspect of an organisation, and thus organisations should produce an integrated sustainability report (SAICA, 2009; Weybrecht, 2010). One of the challenges of environmental sustainability and Environmental Information Management (EIM) is that environmental sustainability information is not easily retrieved, stored and presented (Ernst and Young LLP and Boston College, 2013; Purvis et al., 2000; Solsbach et al., 2011). Decision-making, therefore, concerning sustainability issues becomes increasingly difficult for managers as such information is not easily accessible. Better management of information by organisations can lead to better reporting practices which can be used for decision-making. With improved information management and decision-making, organisations will be able to achieve the main objective of sustainability reporting, which is to produce an integrated report.

It is therefore necessary to investigate the methods, tools, technologies and processes that can improve the process of EIM and reporting. First it is important to integrate the environmental sustainability issues regarding information management within the overall organisational strategy. If organisations want to achieve their environmental sustainability objectives, they must align these objectives with their organisational objectives (A4S, 2009; Ernst and Young and GreenBiz Group, 2012; GRI, 2013c; KPMG, 2008; Speshock, 2010). The Global Information Technology (GIT) report shows that South Africa is doing quite well in terms of availability of latest technologies since it is ranked 39th out of 142 economies for having the latest technologies available (Dutta and Bilbao-Osorio, 2012). This report however also shows that South Africa is a bit further behind in terms of accessibility of digital content, which shows a ranking of 83rd for South Africa out of 142 economies. It could be deduced therefore that if the available technologies were used more effectively it could make the process of accessing digital content easier.

Organisations must therefore use their available technologies and align their Information Technology (IT) strategies with their organisational strategies, also known as business-IT alignment (Pereira and Sousa, 2005). Sixty percent of the Chief Information Officers (CIOs) who took part in the 2012 State of the CIO research, reported by the CIO magazine, stated that business-IT alignment takes the greater part of their time and focus (ITWorld, 2013). A number of studies propose that the use of an Enterprise Architecture (EA) can assist the task of business-IT alignment (Egham, 2010; Iyamu, 2011; Plazaola et al., 2008; Silvius, Waal and Smit, 2009).

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The International Organisation for Standardisation (ISO) defines EA as “The fundamental concepts or properties of a system in its environment embodied in its elements, relationships, and in the principles of its design and evolution” (ISO/IEC/IEEE, 2011, p. 2). An EA consists of four main components namely, business architecture, data architecture also known as Information Architecture and will further be referred to as Information Architecture, Technology Architecture and Application Architecture (The Open Group, 2009a).

It is necessary to investigate the environmental information requirements of an organisation which is needed to produce an integrated sustainability report (Purvis et al., 2000; GRI, 2013c; SAICA, 2011; Stapleton et al., 2001). Stakeholders are demanding greater relevance of sustainability and environmental reporting (Section 1.1.1) and force organisations to report on their environmental impact (GRI, 2013a; King and Lessidrenska, 2009). Therefore organisations have to understand how to manage and incorporate their environmental sustainability strategies and align these to their organisational strategies. This can lead to better environmental reporting and sustainability reporting practices.

EA is extremely important in organisations and the main purpose of EA is to improve the applicability, accessibility and usefulness of information (Section 1.1.2). EA provides the opportunity to address both the information requirements and the tools and technologies that can be used to address the environmental sustainability and EIM requirements of organisations.

1.1.1 Environmental Reporting and Sustainability Reporting

Research and development are increasing gradually in the field of environmental sustainability in South Africa (GRI, 2013c). A study was done by GRI (2013b) to investigate the adoption of integrated sustainability reporting with the focus on South African organisations. This study illustrated that since 2010 only 18% of a total of 756 reports declared by organisations were integrated reports which included both the annual financial report and sustainability reporting information. The majority of the organisations which produced sustainability reports were large organisations from the private sector. Globally it is shown that 74% of private companies produce an integrated sustainability report (GRI, 2013c). This indicates that more South African organisations from different sectors should pay more attention to sustainable development and strategies.

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Sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own need” (World Commission on

Environment and Development, 1987, p. 16). The purpose of sustainability is to disclose information about an organisation’s performance in terms of sustainable development to internal and external stakeholders (GRI, 2013a). The stakeholders could range from employees, customers, suppliers, to financial investors and the broader public.

The public concern about environmental factors has increased over the past two decades and it has been legislated that the public have the right to environmental information (Howman and Nepfumbada, 2000; SAICA, 2009). Therefore, it is important to investigate how the management of environmental information takes place and especially how such information is reported to the public.

Environmental information can be managed by using Environmental Management Systems (EMS) and Environmental Management Information Systems (EMIS) (ISO, 2004; ISO, 2009; El-Gayar and Fritz, 2006). These terms are often used interchangeably but can become confusing and will be defined later. Information management for sustainability reports is a process which includes recording, extracting and compiling information related to sustainability for reporting purposes (Chachage et al., 2006). These records, kept by an organisation about sustainability information are said to be evidence of the organisation’s participating in sustainable practices. The records are also useful for environmental and EMS audits. Records on environmental information are usually kept in record management systems within an organisation.

An EMS is used to establish an environmental policy and for the management of all environmental aspects of an organisation (ISO, 2004; ISO, 2009). An EMS is also referred to as a systematic approach that should be followed in accordance with an internationally acceptable certifiable standard (Stapleton et al., 2001). An example of an internationally acceptable standard for an EMS is the ISO 14001(ISO, 2009). The key elements of an EMS which are in accordance with the requirements of ISO 14001 are: environmental policy, planning, implementation, corrective action and management review. These elements are used by organisations for continual improvement of their environmental processes and are reported in sustainability reports.

Purvis et al. (1999) reported that locating and accessing environmental data is only one of the problems regarding the management of environmental information. This is confirmed in a number of studies (Ernst & Young LLP and Boston College, 2013; Solsbach et al., 2011).

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Information processing and analysis are also problems encountered and must be supported by an effective EMIS. EMIS is defined by El-gayar and Fritz (2006, p. 756) as ‘ organizational-technical systems for systematically obtaining, processing, and making available relevant environmental information available in companies’.

Information management for sustainability reports is a process which includes recording, extracting and compiling sustainability-related information for reporting purposes (Chachage et al., 2006). The records that are kept in an organisation about sustainability information are said to be evidence of the organisation participating in sustainable practices. The records are also useful for environmental and EMS audits. The records on environmental information are usually kept on record management systems within an organisation.

It is important to be able to address the need for a systematic approach in an organisation, firstly to address how environmental sustainability information strategies can be incorporated into the organisational strategies. Pereira (2005) demonstrates that an organisation must address its EA to be able to achieve alignment between business and IT strategies.

1.1.2 Enterprise Architecture

EA was first developed and used by John Zachman during 1987 (Zachman, 1987), however it was restricted to the field of information systems. Since 1987, a steady increase in interest in EA is presently evident (Magoulas et al., 2012). The concept has evolved to include the enterprise as a whole, and is now being interpreted by academia, the public and private sectors. An EA represents how an organisation plans to incorporate changes. It should include the present and future organisational “objectives, goals, visions, strategies, informational entities, business processes, people, organization structures, application systems, technological infrastructures, and so on” (Pereira, 2005, p. 1344). EA has become the focus in many organisations as EA is one

of the main drivers of a successful organisation (Magoulas et al., 2012). EA is defined as guides or frameworks that can assist organisations to apply a plan in their organisations. EA can also be referred to as a blueprint which outlines a set of guidelines of an organisation (Resmini and Rosati, 2004).

It has been reported in some studies that organisations in South Africa still do not use EA due to the skills shortage in the field of EA and as the budget for EA receives a low priority (Evans, 2010; Van der Merwe et al., 2010; Schekkerman, 2005). The report by Schekkerman (2005) included many questions regarding the trends in EA identified by several organisations (Figure 1-1).

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The EA activity ranking for organisations in South Africa was 1.85% and 1.50% in the years 2004 and 2005 respectively and these percentages are a representation of the total number of organisations registered on the website of the Institute For Enterprise Architecture Development (IFEAD). This is an indication that the development and trends of architectural activities were not easily adopted by organisations in South Africa. However a recent study by Josey (2013) shows that South Africa is ranked seventh globally for the number of The Open Group Architecture Framework (TOGAF) certifications. Even though TOGAF is not the only EA framework adopted in South Africa, the TOGAF certification results reported by Josey (2013) was the only recent report of EA activity in South Africa identified at the time of this study. These TOGAF certification results can give some indication that there is a trend of EA adoption in South Africa.

Figure 1-1: EA Activity Ranking (Schekkerman, 2005)

The Josey (2013) study is very relevant since many organisations are using EAs today and research shows that by 2015 even more organisations will use EAs to help align their strategies to their processes (Section 1.2). The problem identified in this study further illustrates that legacy information systems do not make provision for supporting EIM and reporting, nor do they consider incorporating their environmental sustainability strategies in all their processes (Section 1.3). Unless organisations change their way of operating they will be faced with overwhelming demands from a compliance view and from their stakeholders who require such reports. A research statement was identified to direct this study (Section 1.4), which led to identifying the research objectives (Section 1.5) which will be used to answer the research questions (Section 1.6) for this study. A suitable research methodology was selected for this study (Section 1.7). The research statement helps to define this study, yet certain constraints were identified (Section 1.8). The overall chapter structure illustrates the research objectives, research questions and chapter deliverables for each chapter in this study (Section 1.9).

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Relevance of this Study

1.2

Gartner (2010) predicts that by the year 2015 more than 95% of organisations will adopt an EA. A sustainable organisation has the ability to balance social, environmental and economic concerns and thus to present these concerns or success factors in a format acceptable to stakeholders and to the broader public. This is known as a sustainability report (GRI, 2011a; Weybrecht, 2010). Interest and concern concerning environmental sustainability reporting have increased (Rea, 2012). Studies have shown the importance of addressing environmental strategy in an organisation’s strategy (Speshock, 2010; Weybrecht, 2010).

Aldea et al. (2013) report that there is a lack of models which provide a good framework and or a guideline for strategic support. It is therefore important to view what organisations are doing in terms of their strategies to address EIM (Speshock, 2010). It is proposed that the EA which represents how the organisation is managed in terms of its strategies, information or data, technology and applications has to be addressed (Sessions, 2007; Taleb and Cherkaoui, 2012; Wang, Zhou and Jiang, 2008). When introducing an EA in an organisation, it is critical to investigate studies of EA implementations in other organisations and is therefore required to review best-practice of previous successful implementations (Resmini and Rosati, 2004).

Problem Statement

1.3

Existing information systems do not make provision for the environmental processes of an organisation (Ernst and Young and GreenBiz Group, 2012; Molnár and Szabó, 2011). Concern however about the environment, is growing. This is because there is more emphasis on environmental concerns but this can almost be regarded as a new or separate process in organisations.

Cislaghi et al. (2006) report that environmental information is specialised and only key users are responsible for accessing and updating the required environmental information and management functions of environmental information. South African organisations lack developmental and strategic focus on EA activities (Schekkerman, 2005). There is a need to adapt existing EA to support environmental information.

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The research problem investigated in this study is as follows:

The extent to which existing Enterprise Architecture supports Environmental Information Management and Reporting is not known.

Dissertation Statement

1.4

An EA contains components that are able to assist organisations with integrating their strategies, plans and IT components. An EA will be investigated to establish how it can be used to support organisations in managing their environmental information and reporting. This proposed EA will provide a set of guidelines to organisations which should therefore be able to assist organisations in aligning their organisational, IT and environmental sustainability strategies.

The dissertation statement that focuses this research is:

An Enterprise Architecture (EA) can be used to support effective Environmental Information Management (EIM) and reporting.

Research Objectives

1.5

The main research objective (ROM) of this study is:

ROM: To investigate and propose the use of an Enterprise Architecture for EIM (Toolkit and

guidelines) for supporting environmental sustainability strategies and Environmental Information Management and reporting in organisations.

The following six secondary research objectives were identified in order to achieve the main objective:

RO1: To investigate and describe the status of environmental and sustainability reporting in organisations relating to:

 The objectives, benefits and challenges of sustainability reporting for organisations;

 The standards, tools and technologies implemented by organisations for environmental and sustainability reporting; and

 The requirements for Environmental Information Management and environmental reporting.

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RO2: To identify the objectives, benefits and challenges of Enterprise Architecture adoption in organisations.

RO3: To identify the frameworks, tools and technologies adopted for Enterprise Architecture in organisations.

RO4: To identify and apply a suitable research methodology for this study.

RO5: To investigate Enterprise Architecture and environmental sustainability reporting practices in South African organisations.

RO6: To identify the practices of successful South African organisations with regards to the use of Enterprise Architecture for supporting environmental sustainability reporting.

In order to address the research objectives of this study, a number of research questions need to be investigated. The following sections will identify the research questions for this study.

Research Questions

1.6

The main research question (RQM) for this study is: “How can Enterprise Architecture be used to support environmental sustainability strategies and Environmental Information Management and reporting in organisations?”

In order to answer this question, the following secondary research questions were identified: RQ1: What is the status of environmental and sustainability reporting in organisations

relating to:

 What are the strategies for sustainability reporting (objectives, benefits and challenges) for organisations?

 What standards, tools and technologies are implemented by organisations for environmental and sustainability reporting?

 What are the requirements for Environmental Information Management and environmental reporting?

RQ2: What are the objectives, benefits and challenges of Enterprise Architecture adoption in organisations?

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RQ3: What frameworks, tools and technologies are adopted for Enterprise Architecture in organisations?

RQ4: What is a suitable research methodology for this study?

RQ5: What are South African organisations doing with regard to Enterprise Architecture and environmental sustainability reporting?

RQ6: How are successful South African organisations using Enterprise Architecture to support environmental sustainability reporting and Environmental Information Management?

Research Methodology

1.7

The research philosophy that will be adopted by this research is positivism and interpretivism, which allows for research to be conducted on humans (Saunders et al., 2009). An advantage of the positivist philosophy is that the data that will be collected will be based on the findings of surveys and case studies and thus does not rely on the opinions of the researcher. An advantage of the interpretivist philosophy is that it provides the opportunity to investigate data in detail through the use of interviews and especially by the case study strategy chosen for this research (Thomas, 2011).

Both the inductive and deductive research approach will be used for the purpose of this research. The inductive approach is referred to as theory building and the deductive approach is also known as theory testing or what would be described as scientific writing (Saunders et al., 2009). The inductive approach will allow for the establishment of a proposed theoretical model for this study. The deductive approach includes testing a theory or a statement and this approach will help to establish the answers to the posed research questions. A literature review was needed as it helps researchers to familiarise themselves with work that has been done about their topics and provides the researcher with the capacity to construct a research methodology (Erwee, 1994). To address the main research objective of an EA for EIM, it is necessary first to explore its current status in organisations. A survey and case study strategy will be used in this research study (Saunders et al., 2009). The survey strategy will help in the collection of the primary data.

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Thomas (2011) refers to the case study strategy as research which focuses on a single ‘thing’. This ‘thing’ should be viewed in detail and no attempt should be made to generalise from it. The ‘thing’ could refer to as a person, group or event. The case study research method can be used as a qualitative tool that intends to provide descriptions about events or small groups of people or objects (MacNealy, 1999).

The multiple case study selection for this research study will be based on organisations that follow best-practice guidelines for their EA and EIM and reporting practices. The organisations for the case study will be selected based on their score in the survey study. Interviews will be done to verify the proposed EA for EIM and the proposed best-practice guidelines.

The research methods employed in this study are both qualitative and quantitative (Creswell et al., 2007). The relevant research instruments for this research are questionnaires and interviews where structured, semi-structured and unstructured interviews will be done in person and via telephone calls (Gill et al., 2008). Primary and secondary data will be collected for this research not only to answer the research questions but also for the purpose of achieving the research objectives. Once the data has been collected, it will be analysed by using appropriate methods. The data in this research will be analysed using four components of data analysis namely: data collection, data display, data reduction and drawing conclusions (Miles and Huberman, 1994).

Scope and Constraints

1.8

This research will focus primarily on investigating EA for EIM. This study refers to the EA for EIM as a Toolkit. A set of best-practice guidelines for EA for EIM Toolkit is proposed. The proposed EA for EIM Toolkit is based on TOGAF EA design.

The validation of the proposed EA for EIM Toolkit will take place using a smaller sample of organisations selected from the large sample at organisations that initially took part in the survey study for this research. This research will also focus on illustrating how to align the strategies of the organisations to the IT strategies and to the environmental sustainability strategies as well as present examples of tools and technologies to achieve this. The small sample for this study was limited to medium and large South African organisations; and therefore statistical tests for the results were also limited.

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Chapter Structure

1.9

The proposed chapter outline is shown in this section. Research strategies and chapter deliverables are also provided (Table 1-1). The overall outline of the chapter structure is proposed (Figure 1-2). The research topic was introduced in Chapter 1.

Chapter 2 investigates the environmental sustainability strategies of organisations, which will lead to the investigation of the objectives, challenges, standards, and tools and technologies used to create environmental sustainability reports. This chapter will also focus on the environmental information needs. Chapter 2 will also demonstrate the alignment between the environmental sustainability strategies and organisational strategies. EA will be investigated in Chapter 3 in order to establish the use of an EA that can support the environmental sustainability strategy. The research design will include the methods, methodologies, philosophy and the research strategies for this research in Chapter 4. The theoretical model will present the elements for the EA for EIM Toolkit in this chapter.

The validation of the proposed EA for EIM Toolkit will be updated in Chapter 5 based on the results from the survey study. Some organisations will verify the best-practice guidelines for the toolkit which are reported on in Chapter 6 and present the findings from the interviews during the case studies. Therefore the EA for EIM Toolkit will be updated to reflect any new findings which validated the toolkit in this chapter. Chapter 7 will illustrate what can be investigated in the future as part of this research topic. Conclusions and recommendations will be made based on the findings in the survey study, case study and in literature.

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Table 1-1: Chapters Addressing Research Questions and Objectives

ResearchObjectives ResearchQuestions Research Strategies and Data

Collection Methods Chapters Chapter Deliverable

RO1

To investigate and describe the objectives, benefits and challenges of sustainability reporting for organisations.

RQ1

What are the strategies for sustainability reporting (objectives, benefits and challenges) for organisations?

Literature Study

Chapter2

Status of environmental and sustainability reporting in organisations.

To investigate and describe the standards, tools and technologies implemented by organisations for environmental and sustainability reporting.

What standards, tools and technologies are implemented by organisations for environmental and sustainability reporting? To investigate and describe the requirements for

Environmental Information Management and environmental reporting.

What are the requirements for Environmental Information Management and environmental reporting?

RO2 To identify the objectives, benefits and challenges of

Enterprise Architecture adoption in organisations. RQ2

What are the objectives, benefits and challenges of Enterprise Architecture adoption in organisations?

Literature Study Chapter3

The objectives, benefits and challenges of enterprise architecture adoption in organisation.

RO3 To identify the frameworks, tools and technologies

adopted for Enterprise Architecture in organisations. RQ3

What are the frameworks, tools and technologies adopted for Enterprise Architecture in organisations?

The frameworks, tools and technologies adopted for enterprise architecture in organisations. Proposed EA for EIM Toolkit (Version 1).

RO4 To identify and apply a suitable research methodology

for this study. RQ4

What is a suitable research

methodology for this study? Research Design Process Chapter4 Research process and design

RO5

To investigate Enterprise Architecture and environmental sustainability reporting practices in South African organisations.

RQ5

What are South African

organisations doing with regard to Enterprise Architecture and environmental sustainability reporting?

Survey Study: To verify the research objectives (RO1-RO3) and to answer the research questions (RQ1-RQ3).

Chapter5

Survey study results. Proposed EA for EIM Toolkit (Version 2). List of selected organisations for case study.

RO6

To identify the practices of successful South African organisations with regards the use of Enterprise Architecture for supporting environmental sustainability reporting.

RQ6

How are successful South African organisations using Enterprise Architecture to support environmental sustainability reporting and Environmental Information Management?

Case Study: Interviews with organisations to validate the proposed guidelines for EA for EIM Toolkit based on their best-practice.

Chapter6 Proposed guidelines and EA for EIM Toolkit (Version 3).

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Research Question/Objective Research Strategy Deliverable Chapter 7 – Conclusions and Recommendations  Theoretical research contributions  Practical research contributions Chapter 3 – Enterprise Architecture (EA) Status of enterprise architecture adoption in organisations RQ3 RQ2 Chapter 2 – Environmental Information Management (EIM) and Reporting

RQ1

Status of environmental and sustainability reporting in organisations

Chapter 4 – Research Design

EA for EIM Toolkit (Version 1)

Chapter 5 – Analysis of Survey Results RQ5 Survey results Survey EA for EIM Toolkit (Version 2)

Chapter 6 – Case Study Process and Findings Case study results Case study Final EA for EIM Toolkit (Version 3) RQ6 Chapter 1 – Introduction Research objectives Research questions

RQ4 Research process and design

Overall Chapter Structure

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Chapter 2 Environmental Information Management and Reporting

2.1 Introduction

The previous chapter outlined the context for this research where the research objectives were established. Energy sources and global warming effects have increased the demand of “customer pressures, and the need to reduce carbon footprints and emissions” and are forcing organisations

to have sustainability strategies in place (Speshock, 2010, p. 3). South African organisations will have to address their sustainability strategies since according to the King III report “all companies are required to produce an integrated report” which includes both sustainability and

financial information (SAICA, 2009, p. 23).

Speshock (2010) reports that to overcome the challenges of environmental sustainability reporting, organisations should align their sustainability strategy with other organisational strategies and utilise the appropriate resources. Murugesan and Gangadharan (2012) agree that to achieve these sustainability strategies several resources of an organisation are required and one of these resources is the Information Technology (IT) department. The IT resource is also known to form part of the business-IT strategy within organisations in order to promote the “organisation’s profitability, productivity, efficiency, competitiveness and compliance, and positively affect many other strategic goals” (Speshock, 2010, p. 28). The role of the IT department is also to produce

integrated Information Systems (IS) that will overcome information silos within organisations. It can therefore be stated that in order to achieve optimal environmental sustainability benefits the organisational strategies, environmental sustainability strategies and IT strategies should be aligned.

In this chapter the first research question (RQ1) will be addressed, namely, What is the status of environmental and sustainability reporting in organisations?. This research question will be answered by investigating the following elements of the status of sustainability reporting, namely:

 The strategies for sustainability reporting (objectives, benefits and challenges) of organisations;

 The standards, tools and technologies implemented by organisations for environmental and sustainability reporting; and

 The requirements for environmental information management (EIM) and environmental reporting.

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The chapter structure (Figure 2-1) illustrates the different sections and sub-sections in this chapter. In order to answer this research question, environmental sustainability reporting strategies and approaches are investigated and will be based on the field of sustainability reporting in general as well as the environmental sustainability reporting objectives (Section 2.2). A number of environmental sustainability benefits can be achieved when organisations address their environmental sustainability strategies and one of these benefits includes strategic alignment (Section 2.3).

2.1 Introduction

Chapter2: Environmental Information Management (EIM)

2.2 Environmental and Sustainability Reporting Strategy and Objectives

2.3 Environmental and Sustainability Reporting Benefits

2.5 Compliance and Standardisation for Environmental and Sustainability Reporting

2.6 Tools and Technologies for Environmental Sustainability Reporting

2.7 Environmental Information Management Requirements

2.9 Conclusions

2.8 Business-IT Alignment

2.4 Environmental and Sustainability Reporting Challenges

Chapter 1 – Introduction Chapter 2 – Environmental Information Management (EIM) and Reporting Chapter 3 – Enterprise Architecture (EA) Chapter 4 – Research Design Chapter 5 – Analysis of Survey Results Chapter 6 – Case Study Process and Findings Chapter 7 – Conclusions and Recommendations RQ5 RQ6 RQ2 & RQ3 RQ1 Deliverable Status of Environmental and Sustainability Reporting RQ4

Figure 2-1: Chapter 2 Structure

In order to achieve the benefits of environmental sustainability reporting, organisations will have to overcome some challenges (Section 2.4). The main challenges of environmental sustainability reporting are compliance and standardisation and access to quality data and information required for the reports.

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Compliance and standardisation of reporting can pose several difficulties for organisations due to the varied nature and complexity of these standards (Section 2.5). One way of achieving integrated reporting is to utilise the tools and technologies that can aid the tasks involved in producing a sustainability report (Section 2.6). An examination of the challenges of sustainability reporting as well as an investigation of existing technologies can reveal the requirements for systems which must support integrated EIM (Section 2.7). However, technologies alone cannot provide a solution, since these technologies must form part of the IT strategy which must be aligned with the organisational environmental sustainability strategies (Section 2.8). Relevant conclusions will be made based on the findings from theory in this chapter (Section 2.9)

2.2 Environmental and Sustainability Reporting Strategy and Objectives

Labuschagne, Brent and van Erck (2005) identify three main areas of sustainability at four levels in an organisation. The three main areas are economic sustainability, environmental sustainability and social sustainability (Figure 2-2). At Level 1 of the framework a strategy should exist that will entail an organisation’s responsibility towards a sustainable operation. Level 2 illustrates that it is necessary to have initiatives in place that will aid the Triple Bottom Line (TBL). Level 3 and Level 4 show the main categories and information that should be included within each of the three main areas of a sustainability report.

Organisations have a responsibility towards sustainable development as a corporate citizen (SAICA, 2009). Some of these responsibilities are:

 Organisations must effectively govern their operations;

 The organisation must engage external stakeholders; and

 The organisation must minimise its effect on the environment.

It is important to understand that greenhouse gas disclosure has value outside of the regulatory arena due to its utility for stakeholders, investors, customers and suppliers. Independent verification of Greenhouse Gas (GHG) emissions is important, not only for accuracy, but also for its usefulness by both internal and external stakeholders. For example: in the United Kingdom “…over 2500 companies report their emissions to the Carbon Disclosure Project (CDP) which represents over 300 institutional investors that are concerned about climate change and the need to reduce corporate GHG emissions” (Murugesan and Gangadharan 2012, p. 311).

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It is evident that the environment should be of utmost importance to stakeholders and the community in general and to any organisation (SAICA, 2009). One way of ensuring that these environmental responsibilities are met can be through the inclusion of such responsibilities in an organisation’s strategic planning and by means of environmental and sustainability reports (GRI, 2013a).

Figure 2-2: Levels of The Operational Sustainability Framework (Labuschagne et al., 2005)

Magoulas et al. (2012) and Speshock (2010) also emphasise the importance of including sustainability reporting and environmental sustainability plans as part of the organisational strategic planning. KPMG (2008) and Ernst & Young and GreenBiz Group (2012) agrees that the sustainability reporting and environmental sustainability risks and opportunities should be aligned with the organisations overall strategy. Additionally, organisations must be encouraged to embed their overall sustainability strategy into the core strategy of their business. For example, they must get buy-in and support from managers to incorporate a “Green” or an “environmental sustainability” strategy into the organisational strategy.

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Sustainability reporting concerns are seen as a global trend and pose a challenge to managers (KPMG, 2011). Sustainability reporting is “the practice of measuring, disclosing, and being

accountable to internal and external stakeholders for organizational performance towards the goal of sustainable development. A sustainability report provides a balanced and reasonable representation of the sustainability performance of a reporting organisation – including both positive and negative contributions” (GRI, 2011b, p. 43).

Organisations on a global scale are required by legislation to report on their impact on the environment and on their social and economic endeavours (Rea, 2012). The King III report was released in 2009 emphasising the ‘apply or explain’ approach which shows that all organisations irrespective of the size, industry or type are to report on their TBL (Elkington, 1994). Furthermore South African organisations listed on the Johannesburg Stock Exchange (JSE) are required by law to report on the TBL in a sustainability report annually (Sonnenberg and Hamann, 2006). The JSE is the first sustainability index in South Africa where its top 160 listed companies can be viewed. The JSE sustainability index is based on three broad objectives (Sonnenberg and Hamann, 2006):

 To highlight companies from the JSE All Share Index with good sustainability practices;

 To provide the basis for financial Socially Responsible Investment (SRI) products; and

 To satisfy the need to find an objective and accepted method of measuring the sustainability performance of listed companies.

JSE listed organisations have become a reference as organisations which have experience in producing sustainability reports (KPMG, 2008). Therefore these organisations can be used in some cases as a best-practice for the non-listed organisations that have to apply or explain their sustainability performance.

Sustainability reports should reveal the outcomes and results of an organisation’s commitments, strategy, and management approach that happened within the reporting period of an organisation. Several objectives of sustainability reporting have been identified (Deloitte and Touche, 2002; GRI, 2011a; KPMG, 2008; Speshock, 2010). Rea (2012) reports that the response rate of organisations toward economic reporting is much higher (almost double) than the response rate toward environmental reporting.

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Eight common objectives of environmental sustainability reporting were identified. The first objective is to benchmark and compare sustainability performance internally as well as externally between different organisations, over time, in terms of standards and other regulatory factors (Deloitte and Touche, 2002; KPMG, 2008; Speshock, 2010). The seven other objectives for environmental sustainability reporting identified are:

 To improve communication and dialogue with stakeholders about sustainability by using the sustainability report as a dialogue tool (Deloitte and Touche, 2002);

 To improve sustainability marketing (Speshock, 2010);

 To allow stakeholders to use the reports to assess companies in terms of standards and other regulatory factors (GRI, 2011a);

 To initiate programmes to eliminate hazardous substances in materials and parts purchased (Deloitte and Touche, 2002);

 To increase sustainable use of natural resources (for example, land, forests and animal population) (Deloitte and Touche, 2002);

 To understand how the company influences and is influenced by expectations about sustainable development (KPMG, 2008); and

 To control production processes with regard to emissions/effluents control and waste minimisation (Speshock, 2010).

The main environmental sustainability reporting strategy is for organisations to report on their impact on the environment and the measures they take to reduce or eliminate their impact. Communication with stakeholders is a key objective and success factor of sustainability reporting since the report is produced for the benefit of the stakeholders (SAICA, 2009).

Organisations must understand the value of sustainability reporting to ranking and ratings, particularly those of interest to investors. Stakeholders want to know about the organisation’s response to environmental issues and the value it offers from a business perspective. Sustainability reporting is also a communication mechanism between the organisation and its stakeholders and having the report assured by a third party entity adds more value, reliability and validity (KPMG, 2008). Therefore the communication should be clear, concise and purposeful since it should represent the organisation’s transparency. If organisations can address these objectives, then sustainability reporting benefits can be achieved.

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2.3 Environmental and Sustainability Reporting Benefits

Many benefits have been identified regarding environmental and sustainability reporting (Table 2-1). These benefits show that organisations have to raise awareness of and focus on sustainable practices and issues in order to assist organisations to think in terms of the long term well-being of the organisation (Ernst & Young LLP and Boston College, 2013; ACCA, 2013). Organisations also have to prepare for issues that might occur in the communities of operation and focus on these issues to gain knowledge about how to deal with issues such as scarce resources. When these environmental sustainability issues are incorporated in the overall organisational strategy then strategic alignment can be beneficial for organisations as with this effort an integrated sustainability report can be produced (ACCA, 2013).

An integrated sustainability report helps organisations to demonstrate good corporate citizenship and through this they can increase their success and reduce negative social image. A positive social image can enhance the reputation of organisations. This is a sought after benefit amongst organisations which do sustainability reporting, as it provides a platform for organisations to communicate their good deeds to their stakeholders (Ernst and Young LLP and Boston College, 2013). Therefore a sustainability report can help to increase the credibility of an organisation as in addition to when it is needed for national and regional statistics purposes (KPMG, 2008). Organisations which have a positive reputation by disclosing information in their sustainability reports to their stakeholders can also gain greater market access which also allows organisations a differentiated position and competitiveness in the market. Sustainability reporting is seen as a tool which strengthens stakeholder relationships through better communications and greater transparency which creates trust and confidence in the stakeholders towards the organisations (ACCA, 2013). Organisations also use sustainability reports to achieve better brand alignment by explaining to stakeholders what goes into the process of creating and producing a product and which suppliers were involved in achieving such success.

An enterprise architecture for environmental information management and reporting

AN ENTERPRISE ARCHITECTURE FOR

ENVIRONMENTAL INFORMATION MANAGEMENT

AND REPORTING

Anthea Van der Hoogen

An Enterprise Architecture for Environmental

Information Management and Reporting

By

Anthea Van der Hoogen

Declaration

Acknowledgements

Summary

Table of Contents

List of Figures

List of Tables

List of Abbreviations

Chapter 1

Introduction

Background

1.1

Relevance of this Study

1.2

Problem Statement

1.3

Dissertation Statement

1.4

Research Objectives

1.5

Research Questions

1.6

Research Methodology

1.7

Scope and Constraints

1.8

Chapter Structure

1.9

Overall Chapter Structure

Chapter 2

Environmental Information Management and Reporting

2.1

Introduction

Chapter2: Environmental Information Management (EIM)

2.2

Environmental and Sustainability Reporting Strategy and Objectives

2.3

Environmental and Sustainability Reporting Benefits